Wall Street report: Tuesday close

ACCOUNTING jitters following Enron's collapse hammered shares in a slew of companies, including a conglomerate that counts former Conservative Party Treasurer Lord Ashcroft among its directors.

Shares in Tyco International plunged another $8.35 or 20% to $33.65, representing a loss in market value in the past month of roughly $40bn (£26.5bn). Tyco, which has been on an acquisition spree over the past decade, tried again to bury suggestions that its results had been bloated by the manner in which it had booked its purchases.

Vehement denials from the company and a plan to demerge itself have failed to stem the selling, which has driven the shares down nearly 50% since the start of the year. Ashcroft, who held 6.4m. shares in Tyco a year ago, has sold roughly 2.5m shares since then at prices around $60 a share.

Williams Co., an energy trader and utility company that has seen its accounting questioned by analysts, plunged $5.36 or 22.2% to $18.78 after it said it would delay an earnings report to study issues related to the spin-off of its telecoms subsidiary.

Bank holding company PNC Financial stumbled $5.79 or 9.4% to $56.08 as it disclosed that the Federal Reserve had ordered it to reclassify some of its accounting entries.

Other companies sometimes mentioned as affording themselves generous book-keeping treatment also fell. IBM lost $5.15 or 4.8% to $103. General Electric was shaved $1.69 or 4.4% to $36.46.

Bryan Piskorowski, market commentator at Prudential Securities, blamed the sell-off on the 'Enron effect...As you peel away at the story, investors are questioning accounting methods more and more and the bears are feasting on it.' Another trader termed the sudden preoccupation with accounting 'Enronitis.'

Such concerns helped drive the Dow Jones Industrial Average down 247.51 points or 2.5% to 9618.24 points, a two and a half month low. The Nasdaq Index skidded 50.93 points or 2.6% to ,892.98.

The losses came despite new data encouraging hopes that the economy may be lifting out of recession. Orders for durable goods rose 2%, higher than economists had expected, and consumer confidence climbed to levels last seen just prior to September's terror attacks.

Stronger than expected figures from Texas Instruments and Honeywell provided more fodder for those analysts predicting a rebound in company profits. Shares in Texas Instruments, the biggest maker of semiconductors for cellphones, surged $1.59 or 5.6% to $29.96. Honeywell jumped early, but by the close had drifted to a loss of $1.15 or 3.6% to $30.90.

Merck, the second biggest US pharmaceuticals company, gained 52 cents or 0.9% to $57.52 after it said it would sell part of its Merck-Medco prescription drug subsidiary in an initial public offering.

Coca-Cola retreated $1.21 or 2.7% to $44 after a 4% growth in net sales disappointed its followers. United Parcel Service dipped 70 cents or 1.2% to $56.40 after it topped expectations in its latest quarter, but was caught up in the general downdraft.

Banks and financial services were among the hardest hit. Goldman Sachs listed $3.37 or 3.8% to $84.48, Merrill Lynch slid $3.96 or 7.5% to $49 and Citigroup fell $2.60 or 5.3% to $46.71.

Some of the focus for Wednesday's trading will be a meeting of the Federal Reserve Board which economists expect will result in no change to interest rates. The outcome from that meeting could be announced at about 7.15 pm London time.